Aggressive expansion to over-the-top video distribution across its content portfolio help Discovery Inc. post second-quarter (ended June 30) net income of $947 million, compared with net income of $216 million during the previous-year period.

The bulk of that increase came from a non-cash tax benefit and higher operating revenue. Total revenue increased 1% to $2.88 billion.

Discovery continues to benefit from the $14.6 billion acquisition of Scripps Networks Interactive in 2017, home to popular Food Network, HGTV (“Flip or Flop,” and “Fixer Upper” stars Chip and Joanna Gaines), Travel Channel and DIY Network programming, among others.

In the quarter, Discovery launched nine additional networks on YouTube TV in the U.S. and signed a multi-year live and on demand carriage agreement with fuboTV.

Earlier this year, Discovery and BBC Studios announced a series of agreements for a new 10-year distribution deal, which includes content for a pending global streaming service.

The company also has a partnership with the PGA European Tour for subscription streaming video service, Golf TV, expanding its content portfolio and move towards becoming the “digital home of golf” around the world.

The wide-ranging agreement includes international multi-platform live rights, in selected territories, to all European Tour events and the next two Ryder Cups.

“We delivered another quarter of strong operating and financial performance with the benefits of the Scripps Networks acquisition flowing through all areas of our global business, while also accelerating our pivot to digital and direct-to-consumer offerings,” CEO David Zaslavsaid in a statement. “With an exceptional team in place, strong top-line performance and a healthy balance sheet, we are confident in our ability to continue executing on our strategic priorities to drive long-term growth and shareholder value.”

On the heels of WarnerMedia putting a name (HBO Max) to its pending subscription streaming video service, Disney launching branded service as well as expanding Hulu globally, Discovery CEO David Zaslav says “chasing the same ball” (i.e. scripted digital content) with the world’s biggest media companies is not the company’s focus.

Speaking July 10 with CNBC from the Allen & Co. confab in Sun Valley, Idaho, Zaslav contends the bustling SVOD market is turning into a “street fight” — a scenario he believes Discovery has successfully side-stepped.

“[About] 50% to 60% of the content that people consume is not scripted series or scripted movies,” Zaslav said. “For us, it’s home [HGTV], food [Food Network], Discovery, Oprah, crime [ID], Chip and Joanna Gains [‘Fixer Upper’]. We own most of the golf [programming] in the world, most of the cycling. We have almost all [non-scripted] quality content. And we own it everywhere in the world.”

With Netflix and Hulu expanding non-scripted programming, including documentaries and food-themed reality TV, Zaslav says Discovery’s market hold on food, home and crime-themed shows is not in threat.

“We’re pretty secure in our space,” he said. “People aren’t buying Netflix to watch a home [improvement] show. We think we have something very differentiated and people come to us for it. They come to us for it on all platforms in all languages.”

Yet, much of HGTV, Food Network, ID and Oprah content is consumed through traditional pay-TV channels — distribution under threat by over-the-top video.

Zaslav agrees the traditional linear TV business is in secular decline. But he said Discovery generated about $3 billion in free cash flow in its most-recent fiscal year.

The executive said Discovery dominates the female non-scripted market in the United States, with OTT video businesses targeting golf (outside the U.S.), cycling and natural history.

“We have a low to mid-single digit growth company, having nothing to do with all of the global IP that we own,” he said. “We think it’s sustainable that we can grow low to mid-single for the next several years.”

“That’s why we did Scripps [Networks] acquisition, because we think people that love food are always going to come to food, people that love home are always going to come to home. So, we think that this is an ecosystem that will work together,” Zaslav said.

With Disney buying Fox, Comcast acquiring Sky and AT&T buying Time Warner, Zaslav dismissed suggestions Discovery would have merge with another major media company to remain competitive.

“We’re the largest independent media company,” he said. “We think some of the assets we have that we’re the largest international media company. We’re in 200 countries.

“But in the long run if we’re wrong, then we have the biggest assortment of IP in affinity groups that people love and we’re in every language around the world. We think that we’re going to win either way. We’ll be more valuable.”

Online TV service FuboTV continues to transition from its original soccer roots.

The service June 18 announced a new, multiyear carriage agreement with Discovery, bringing 13 networks to the live-TV streaming service in the coming weeks.

The deal extends the previous pact between the companies that began with the former Scripps Networks Interactive (acquired by Discovery) and included carriage of their five networks, including HGTV and Food Network.

“This agreement further exemplifies the viewer affinity for our beloved brands and talent, and fuboTV’s commitment to offering high-quality, world-class content to customers,” Eric Phillips, president of affiliate distribution at Discovery, said in a statement.

Discovery Channel, TLC, Investigation Discovery, Animal Planet, OWN: Oprah Winfrey Network and MotorTrend will be available on the streaming service’s base package, fubo Standard, joining HGTV, Food Network and Travel Channel, which are already available on the service.

At the same time, an expanded suite of Discovery networks, including Science Channel, Destination America, Discovery Family, American Heroes Channel, and Discovery Life, will be added to fuboTV’s add-on package, fubo Extra ($5.99/month for 30+ channels) joining DIY Network and Cooking Channel.

Additionally, Discovery en Español and Discovery Familia will be available on fuboTV’s Spanish-language package, fubo Latino ($24.99/month for 20 channels), and the Latino Plus add-on package ($7.99/month for 15 channels).

In addition to bringing subscribers each network’s live linear feed, the agreement also includes a library of on-demand Discovery content, bringing fuboTV’s VOD library to over 60,000 movies and TV episodes per month.

“We are excited to be adding more Discovery brands alongside their lifestyle networks, which we already carry,” said Joel Armijo, CFO, fuboTV. “These brands, including HGTV and Food Network, are among our top performing entertainment networks, and this agreement allows us to extend our partnership for years to come. We expect to be similarly successful with our new Discovery networks.”

U.S. media giant Discovery and German pay-TV operator ProSiebenSat.1 are launching in June an online TV service in Germany dubbed “Joyn.”

The service — similar to Sling TV, DirecTV Now, etc. in the United States — replaces 7TV and will feature about 50 channels streaming content seven days ahead of pay-TV and available on VOD for 30 days.

With a goal of 10 million subscribers, “Joyn” will feature original content as well as movie services Maxdome and Eurosport Player. It will be accessible on TVs, smartphones, tablets and the Internet.

Netflix currently has about 2.6 million German subs, while Amazon Prime Video has about 3.3 million.

“We are aiming to transform the German video entertainment market,” Alexandar Vassilev, managing director of Joyn, said in a statement.“Our focus is exclusively on the needs of our audiences and we commit to actively listen and reflect their feedback as we make our platform a success.”

For Discovery, the move represents another step integrating internal brands in Europe through over-the-top video distribution.

The parent to HGTV, Food Network and DIY Network, among others, earlier this year bowed Home & Garden TV in Germany, including a series of localized reality TV shows centered around home improvement.

Television shows about food, home improvement, buying and selling continue to resonate with viewers and the fiscal bottom line of Discovery Communications.

The media company May 2 reported first-quarter (ended March 31) net income of $384 million compared to a net loss of $8 million during the previous-year period. Revenue increased 40% to $1.4 billion from $1 billion last year.

Discovery is planning new programming and SVOD platforms around the Gaines and their Magnolia brands.

Other quarter highlights included previously reported 10-year global partnership with the BBC for subscription streaming video content as well as a resolution of the UKTV joint venture. Secured a new distribution agreement in the U.S. with YouTube TV, adding to broad inclusion across online TV platforms.

Indeed, Discovery in launching the HGTV brand in Germany and a golf-themed SVOD service (“Golf TV”) overseas with the PGA European Tour.

“In the first quarter we delivered a solid start to 2019, as we continue to power people’s passions through our loved brands and our owned global IP in genres that nourish audiences around the world,” Discovery CEO David Zaslavsaid in a statement.

Based on 66 OTT providers, led by Netflix, Hulu and Amazon, U.S. OTT access revenue grew 37% to $16.3 billion in 2018 and is forecast to reach $22 billion in 2019, according to a new research from Convergence Research.

The research firm has released two new reports, “The Battle for the American Couch Potato: OTT and TV” and “The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless.”

Still, U.S. TV subscriber average revenue per user (ARPU) is still forecast to be three times U.S. OTT subscriber household ARPU in 2021.

The firm estimates 2018 U.S. cable, satellite, telco TV access (not including OTT) revenue declined 3% to $103.4 billion in 2018 and forecasts 2019 will see a similar decline. Also, 2018 saw a decline of 4.01 million U.S. TV subscribers and 2017 a decline of 3.66 million, according to the firm, which forecasts a decline of 4.56 million TV subs for 2019. The U.S. TV subscriber
base will decline 5% in 2019, from a decline of 4% in 2018, according to the firm’s estimates.

By the end of 2018, the firm estimates 30% of households did not have a traditional TV subscription with a cable, satellite, or telco TV access provider, up from 26% at the end of 2017. The firm forecasts that number to reach 34% of households by the end of 2019. Convergence Research estimates 2018 saw almost 5 million cord cutter/never household additions.

The firm projects that a number of OTT plays, including large and niche, will fail due to insufficient subscriber traction, cost and competition, noting major programmers continue to accelerate their direct-to-consumer drive, including Disney and WarnerMedia. Other developments noted by the firm include:

Hulu spends more on content per sub than either Amazon or Netflix and continues to discount (notably with Spotify);

CBS/Showtime’s OTT subscriber trajectory has been faster than expected;

Discovery has backed and supplied Philo, gone live with Hulu, Sling and YouTube TV, and will be launching an OTT service with the BBC;

NBC Universal will be launching an OTT service in 2020;

and Viacom has backed and supplied Philo and others, acquired Pluto and Awesomeness TV and is producing for Amazon and Netflix.

YouTube TV has raised its monthly subscription price 25% to $49.99 from $39.99. Subscribers billed through Apple Pay will see their plan increase to $54.99.

The Google-owned online TV service made the announcement April 10, which coincided with a content distribution agreement with Discovery. Subs now have access to eight new channels, including Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Animal Planet, Travel Channel, and MotorTrend.

The additions bring to 70 channels available on YouTube TV, including local ABC, CBS, NBC and Fox affiliate coverage in 90% of the markets the online TV service is available.

“We’ll also be adding OWN: Oprah Winfrey Network later this year,” Christian Oestlien, VP of product management, YouTube TV, wrote in a blog post announcing the changes.“In addition, Epix is now available for an additional charge.”

Discovery and BBC Studios April 1 announced a series of agreements for a new 10-year distribution deal, which includes content for a pending global streaming service. The deal also involves a development pact for BBC Studios’ genres of natural history, animals, adventure, science, travel, space, history and civilization documentaries.

The new partnership, effective in all territories outside the United Kingdom, Ireland and Greater China, will make Discovery the exclusive global home of BBC natural history programs on SVOD, including the “Planet Earth,” “Blue Planet” and “Life” franchises, as well as future BBC-commissioned series from BBC Studios, following their linear TV transmission.

Discovery also acquired SVOD rights to hundreds of hours of BBC programming across factual genres. All of this content will form one of the pillars of a new global streaming service, which will also include some of Discovery’s programming library and original content created for the service.

The service will launch by 2020 and will form a key part of Discovery’s growing portfolio of direct-to-consumer services that will also be made available to TV distribution partners for retail.

Separately, the two companies finalized a strategic split in the joint UKTV’s channels business in the U.K. that complements the strategic focus and commercial business of both organizations.

“As the two market leaders in natural history and factual programming, [BBC CEO Tony Hall] and I look forward to working together again – our teams represent over 100 years of combined experience,” David Zaslav, CEO of Discovery, said in a statement. “From the planets to the poles, and documenting every species in between, the world has always been part of Discovery’s DNA. It is who we are.”

Online video subscribers in the United States average 3.4 streaming services and pay an average of $8.53 per month per service, according to a new study.

The nScreenMedia study, “Keep My Customer — Why Consumers Subscribe To, Stay With, Cancel, and Come Back to Online Video Services,” also found that 70% of households in the United States and 40% of U.K. homes have a subscription to at least one streaming video service.

The study was commissioned by Vindicia, an Amdocs company providing business-to-consumer digital services monetization.

Involuntary cancellation is a problem for the industry, according to the study. These payment failures occur when a credit card problem, such as insufficient funds, results in automatic cancellation of a customer. The study revealed that more than a quarter of U.S. and a third of U.K. online video streamers have had a SVOD service canceled due to a credit card problem. And of those groups, 30% did not return to the service.

“Involuntary cancellations are a huge problem for the SVOD industry, particularly among young subscribers,” said study author Colin Dixon, founder and chief analyst at nScreenMedia, in a statement. “Young adults from 18 to 34 years old are twice as likely to have experienced involuntary cancellation in the U.K., and three times more likely in the U.S.”

“For video streaming services, the ability to acquire and retain subscribers is vital to their success,” said Anthony Goonetilleke, group president, media, network and technology, Amdocs, in a statement. “However, streaming services are losing subscribers — and millions of dollars in annual revenue — due to involuntary credit card cancellations. This kind of customer churn is largely preventable. By leveraging the right technology, video streaming providers can recover failed payment transactions and capture revenue that would otherwise be lost, enabling them to better compete in a highly competitive market.”

In terms of overall cancellations, the survey looked at how often people cancel their service and their reasons for doing so. In the United States, 38% of the survey group said they have canceled one or more services in the last year. Of that group, two-thirds said they had canceled one service only, and just one in 10 have canceled three or more services.

Netflix users are slightly less likely than average to have canceled service in the last year, according to the study, while Hulu users are slightly more likely. Amazon Prime Video users are no more or less likely than average.

The top two reasons cited for canceling a video service: people couldn’t find enough content they liked and didn’t find the service a good value for their money.

Previous customers are the best new prospects, as the study found that 33% of U.S. and 25% of U.K. cancellers have been persuaded to sign up for service again.

Discounted subscriptions are an under-exploited opportunity for service providers to win new customers. The survey revealed that a 20% discount for a three-month commitment generated the highest interest level, with 66% of U.S. and 57% of U.K. subscribers saying they were likely or extremely likely to take the offer. Three months is an important milestone, because subscribers that stay this long are much less likely to leave the service. Surprisingly, the study found that offering more than a 20% discount did not result in more interest.

The study also found that free-trial abuse is not a serious problem for online video service providers. While 49% of U.S. and 62% of U.K. online video subscribers have canceled at least one service within the free trial period, only 5% in the U.S. and 2% in the U.K. have canceled within the free-trial period four or more times in the last year.

When it comes to retaining existing subscribers, content is king. The study found that 64% of U.S. subscribers and 55% of U.K. subscribers have been with their longest-tenured service for one year or more. When asked why they stay, respondents said having plenty of interesting content to watch was the top reason. Value for money was a close second place, and ease of finding something good to watch came in third. Interesting original content was the fourth reason, while providing plenty of new shows took the fifth-place spot.

Meanwhile, Amazon’s expanding influence in the VOD market is evident. The study found that one-third of U.K. and U.S. Prime Video subscribers have purchased an add-on video service, with higher income individuals more likely to use Amazon Prime Video and to purchase an add-on. In the United States, the most popular video add-ons are premium services such as HBO, Starz, Showtime and Cinemax. CBS All Access is also very popular. In the United Kingdom, the most popular video add-ons are Eurosport Player, Discovery, ITV Hub+ and FilmBox.

To learn more about the nScreenMedia study or to download a copy, visit here.

Discovery Feb. 26 reported fourth-quarter (ended Dec. 31, 2018) net income of $265 million following a net loss of $1.1 billion during the previous-year period. Revenue increased 51% to $2.8 billion from $1.85 billion a year earlier.

For the fiscal year, net income reached $594 million compared to a $337 million loss in the previous year. Revenue increased 54% to $10.6 billion from $6.9 billion.

Discovery has also invested hundreds of millions in sports programming in Europe, including Olympics rights and an over-the-top video deal for the PGA European Tour.

It also inked exclusive pay-TV and streaming deals with Chip and Joanna Gaines, the husband and wife team behind the hugely successful “Fixer Upper” franchise, and Christina El Moussa, the prettier half of the now-divorced from “Flip or Flop” husband/co-star Tarek El Moussa.

“2018 was a transformational year for Discovery, highlighted by our operational accomplishments, our strong progress in synergy generation and our overall solid financial performance, as we continued powering people’s passions around the world,” CEO David Zaslav said in a statement. “Discovery is a differentiated global content company, and we are optimistic that we will continue to build on all of our operating momentum to drive additional shareholder value into the future.”